A viable solution to reach the inaccessible
In sub-Saharan, an estimated 600 million people do not have access to an electricity grid, leaving many reliant on expensive solutions such as candles, kerosene and diesel. As an affordable and sustainable alternative, a microgrid innovation has been developed by Standard Microgrid, the inspiration of which comes from a village in the Southern highlands of Tanzania.
By harnessing the power of a nearby stream, Edisio Leopard Kayombo, a farmer and selftaught electrician, built a micro hydropower system, delivering clean power to his much value they derive – $1 per month for a lightbulb and radio or $3 to add a television set to the basic package.
Impressed with the business model and service offering, Standard Microgrid has developed a community-managed, off-grid micro utility business model, using proprietary technology to monitor the systems remotely and manage demand. This enables the firm to deliver maximum benefit to the end-user per kilowatthour of energy produced. The system utilises tier 1 components and is fully automated so as to be managed from anywhere in the world.
In April 2016, the containerised ‘utility-in-abox’ solution was delivered to Mugurameno Village, Lusaka Province, Zambia. Funded primarily by a grant from Empowered by Light, with logistical support provided by local firm Conservation Lower Zambezi, a non-profit organisation combating wildlife poaching in the Lower Zambezi National Park. The project provides energy services to 32 homes and businesses as well as energy for high quality lighting to the Mugurameno Basic School, which educates more than 500 learners.
Local resident Regina Tembo, who trained during the system’s deployment on the use of the mobile application, is operating the microgrid which forms part of the project developer’s community upliftment goals. With gender equality being another primary focus area, the mobile application and billing platform empowers unskilled women within the community to purchase and resell energy credit. Due to the hyper-efficiency of this proprietary grid management technology, power can now be supplied at a price that is substantially less than the current least-cost alternative.
One major obstacle is the lack of available data across the microgrid industry for investors to assess the risk of providing capital to the scale-up portion of this project. Once available, the project’s data will serve as an industry benchmark; however, until then extremely high costs of capital are the reality.
The second critical challenge is identifying, recruiting and training key personnel in Zambia to maintain the system and provide customer support. The project developers have had constructive dialogue with relevant government agencies, but Zambia’s regulation does not currently contemplate how microgrids should be regulated, thus presenting some regulatory risk.
There were some initial concerns prior to installation about power cables being buried near homes and the potential risk of people getting billed by just having power lines near their home (even if they didn’t use them). However the confusion was quickly resolved.
The end-user feedback has indicated a very high level of satisfaction across all users mainly due to the increased earning potential, convenience and reliability the service affords. Users have reported an improved quality of life due to safe and clean indoor lighting. Others have highly rated the outdoor security lighting on homes, where the community now feels safer walking between houses after dark. Residents commended the fact that power was being provided to the school, allowing for adult classes in the evenings.
Small businesses have been created and are growing due to the availability of electricity to power refrigerators – the number of refrigerators in the community has increased eightfold and shop owners have reported an increase in turnover due to the sale of cold drinks. The remaining feedback from the community requested that the microgrid be extended to reach more users.
With the first pilot now complete, the project developers are looking to roll out 150 sites by 2021. These will be funded by a mix of retained earnings, grant, debt and equity. The expansion will serve 21,750 homes, businesses and institutional connections with an estimated 130,500 end users for the 20-year power system lifespan.